Lee Seo-hyun, chairwoman of the Samsung Welfare Foundation and former president of Samsung C&T's fashion division

By Park Jae-hyukSamsung Group appears to be in dilemma over its sagging fashion business since Chairman Lee Kun-hee's second-oldest daughter Lee Seo-hyun left Samsung C&T, Dec. 6, according to industry officials Thursday.The former president of Samsung C&T's fashion division, who had worked for the company for 16 years, stepped down after she was appointed chairwoman of the Samsung Welfare Foundation.The officials said the fashion unit's deteriorating performance in recent years was one of the main reasons for the heiress' abrupt departure.Some even said Samsung C&T may sell its sluggish business, citing the group's previous disposal of chemical and defense units between 2014 and 2015.In 2017, Samsung C&T's fashion division posted 1.57 trillion won ($1.39 billion) in sales with a mere 32.6 billion won operating profit.Although it has maintained the top spot in the nation's apparel market, followed by LF, Handsome and Kolon FnC, its sales have been stagnant over the past four years.What is worse, it suffered 8.9 billion won and 45.2 billion won in operating losses in 2015 and 2016, respectively. In addition, its operating losses from January to September this year have reached 12.5 billion won.In 2017, the conglomerate temporarily posted a 32.6 billion won operating profit in its fashion business, due to its disposal of unpopular brands, such as MVIO and Beanpole Kids.Against this backdrop, the fashion division's proportion of Samsung C&T's revenue dropped to 5.97 percent in 2017 from 13 percent in 2015. The trading and investment group accounts for 42.9 percent of the company's sales, while the construction group accounts for 40.9 percent.

An 8Seconds store at COEX in southeastern Seoul / Courtesy of Samsung C&T

Industry officials regard the failure of 8Seconds fast fashion brand as one of reasons for the poor performance.The former president reportedly tried to defeat Japan's Uniqlo with Samsung's own fast fashion brand, but 8Seconds posted 186 billion won in sales in 2017, lagging behind E-Land Group's SPAO, which posted 320 billion won, and Shinsung Tongsang's Topten, which posted 200 billion won. Uniqlo posted 1.37 trillion won in sales in Korea.Amid the growing concerns, Samsung C&T has denied rumors about disposal of the fashion division.Most industry officials also say Samsung will prioritize the transfer of the group's control to heir apparent Vice Chairman Lee Jae-yong for a while."Although the fashion business is in difficulties for now, it will be not easy for Samsung to sell off the fashion division that originated from Cheil Industries, which was the group's parent company in 1954," an industry observer said.Samsung C&T said its fashion division will not suffer a leadership vacuum as its management structure is systematic.According to the company, Vice President Park Chul-kyu will head the fashion group for the moment.